Watch out Amazon! Flipkart is looking to end its funding drought with $1.5 billion deal

India’s top online marketplace Flipkart is looking to raise around $1.5 billion in fresh funding and end its cash drought.

As per various reports, the fresh funding round for Flipkart will be led by US-based eBay and China's Tencent.

If Flipkart seals the deal, this will help with fight rising competition from Amazon and Alibaba.

"Talks with eBay are at an advanced stage, and a strategic deal may include Flipkart acquiring or merging their India operations,” ET quoted sources as saying.

As eBay might invest about $400-500 million, there is a possibility of a third investor as well.

“Best known for its mobile messaging application We-Chat, Tencent - an investor in Indian startups like messaging platform Hike and healthcare startup Practo - has conducted due diligence on Flipkart,” two people aware of the matter told ET.

Flipkart has to seal the deal as Amazon India received whopping Rs 7,000 crore in 2016 from its parent company. The American major also increased its commitment to its Indian operations from $2 billion to $5 billion in June 2016.

Besides, even Alibaba has entered the fray by buying a majority stake along with affiliate Ant Financial in payments provider Paytm's online marketplace. Alibaba pumped $177 million in Paytm Mall earlier this month.

For eBay, a successful round of investment will mark a new innings in the Indian online retail industry.

"The current round of funding will provide a much-needed boost and improve the sentiment towards ecommerce and the overall startup sector in India. Apart from the company, the ecommerce ecosystem partners such as logistics companies and others will benefit,” Sreedhar Prasad, partner for ecommerce and startups at KPMG India, told ET.